Integrating different human resource systems is one of the challenges of mergers and acquisitions, and successful organizations begin efforts to retain top talent early.
Retention bonuses were fairly common among companies that acquired other organizations, with 92 percent using them, according to a new global survey by Towers Watson. They were especially common in North America, as were "pay-to-stay" provisions extending six months to a year beyond the closing of the deal. Most of those surveyed relied on retention agreements that were built around bonuses. Almost three-quarters of respondents indicated they use metrics measuring individual performance to determine bonuses. Many others utilize organization-wide performance-based metrics.
"In today’s climate, when companies are often buying skills or relying on an acquisitions staff to meet critical sales or market share goals, the ability to retain the right people can be a make-or-break element in the deal," said Mary Cianni, global leader of M&A services at Towers Watson. "Companies and shareholders increasingly recognize that achieving a deal’s strategic goals depends on having the right people, with the right skills, in the right roles."
Those who succeed in retaining talent tend to determine which personnel they want to retain during the negotiation or due diligence phases and ask them to sign retention agreements before the deal closes. Beginning sooner allows retention programs to be more carefully structured. Successful programs may rely on personal outreach and other methods in addition to bonuses.
